A bill to establish a “regulatory sandbox” by waiving certain obstacles for a trial period for fast-emerging financial and insurance products and services is one step closer to becoming law. It cleared the Senate Commerce and Insurance Committee on Tuesday, Sep. 21.

House Bill 624 would create the regulatory sandbox, which is similar to one authorized in Arizona in 2018. At least five other states have since adopted similar laws, and some half dozen are considering similar bills this year.

“I’m very pleased to see the sandbox bill moving forward,” said Jordan Roberts, government affairs associate for the John Locke Foundation. “This bill would keep North Carolina as a regional and national leader for business by encouraging companies with innovative finance and insurance products to test them right here in North Carolina. The sandbox approach ensures the right balance of consumer choice and protection.”

“A regulatory sandbox is a creative initiative to keep North Carolina competitive and encourage more businesses to come to the state,” Roberts added. “It recognizes that government moves much slower than innovators.”

H.B. 642 would apply only to the finance and insurance industries. Among other changes, the bill would create a new Innovation Council to market the program and seek and review applications. The council would evaluate applications based on level of innovation, potential consumer risks, level of consumer protection and complaint resolutions in place, and level of business plan and capital. It would then make recommendations and pass them along to the state agencies ultimately responsible for the final decision.

H.B. 624 is similar to another version — Senate Bill 470 — passed by the Senate on June 14 in a unanimous 47-0 vote.

The bill now heads to the Senate Finance Committee, then Senate Rules, before a vote on the full Senate floor.